gwen: a late night tax cut vote. a senate showdown on earmarks. a setback on health care. and the death of a diplomat. tonight on "washington week." >> on this vote, the yeas are 277, the nays are 148. the motion is adopted. >> if we're serious about giving the economy movement again, we have to end all the uncertainty coming out of washington. gwen: republicans claim victory in the house, and democrats claim victory at the white house. >> i'm going to sign this bill to make sure that people are seeing a bigger paycheck come

january. gwen: while senate republicans force democrats to slice billions of dollars in projects from both parties out of a budget bill. >> the american people said, enough with the spending. enough with the pork barrel earmark spending. >> but much remains to be completed. >> i don't think that's really what the american people want. we are in session. if necessary, up to january 5. gwen: even as the courts threaten to undercut the president's signature health care law. >> you have to stay within the boundaries of the constitution. gwen: plus, the war efforts in afghanistan. >> there will continue to be obstacles and setbacks, but our partnership is slowly but steadily improving. gwen: how will the sudden death of ambassador holbrooke change the diplomatic calculus. >> this is not going to be

signed overnight. it is going to be a difficult struggle. gwen: covering the week, janet hook of "the wall street journal." pete williams of nbc news. martha raddatz of abc news. and doyle mcmanus of the "los angeles times." >> award-winning reporting and analysis, covering history as it happens. live from our nation's capital, this is "washington week" with gwen ifill. produced in association with "national journal." corporate funding for "washington week" is provided by -- >> we know why we're here. to give our war fighters every advantage. to deliver technologies that anticipate the future today. >> and help protect america everywhere, from the battle space to cyber space. >> around the globe, people of

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station from viewers like you. thank you. once again, live from washington, moderator gwen ifill. gwen: good evening. almost as if their coaches were about to be turned into pumpkins, the house voted to extend the expiring bush era tax cuts at one minute before the stroke of midnight last night. impending holiday deadlines focused a legislative mind in washington. remember the christmas eve health care vote? this year is no different. so now with any number of critical issues still hanging fire, every victory is one that can be universally claimed. >> candidly speak, there are some elements of this legislation i don't like. there's some el lts that members of my party don't like. there's some elements that republicans here today don't like. that's the nature of compromise. >> we want to stop all of the tax hikes for at least the next

two years, and secondly, that we ought to have the funding bill through september 30 at 2008 levels before the stimulus and before the bailouts and all the other nonsense that's gone on here. gwen: all the other nonsense. you see, this time last week, janet, we were talking about the liberal revolt in the house floor and even on the senate floor. what happened? >> well, over the course of the last week, which was consumed by talk about this tax bill, two things had. at least two things happened among liberals. a lot of liberals looked at the deal and found on closer inspection it wasn't quite as bad as they thought it was at first. they found stuff to like in it. the other liberals looked at it, hated it, fought it, and found they were powerless to stop it. so the debate starts in the senate, and i think that's where the sorting through process -- people said, well, you know, let's consider the alternative, but also, there was stuff that

they hated. there was also a lot of stuff they liked. an extension of unemployment, insurance benefits, tax breaks that they probably wouldn't have gotten any other way other than pairing it with a lot of things republicans liked. so that's what obama was talking about, a compromise. gwen: it also sounded as if he had bought into a basic republican tenet which is that they were sim youlative. >> that is probably the thing that infure rated a lot of liberals. and democrats in general had been campaigning for a really long time, and obama made it simple to his campaign, against spending for the tax cuts for the upper income brackets. so that was bad enough. to add insult to injury, the deal included this estate tax deal that levied a tax on inheritances that was much higher than anybody had been talking about before. so that theory was somewhat quelled in the senate by a pragmatic look, and, well, it

could be worse next year. so the senate vote was like 81 to 19. they don't have votes like that in the senate very often, so then it goes to the house, and the liberals fought a lot harder there. it took a lot more to get it through. but in the end there too they had practically a landslide roll call ated my night, as you said. >> just a week ago, it looked an awful lot like those house liberals were at least going to assist in amending one part of it, i guess the state tax part to amend it. how come that went away? >> they actually did have a vote on the estate tax and it went down, and it was actually an amendment that had passed -- it had passed a year ago, but at that point, it was perceived -- well, first of all, preceding that vote, they had this monumental vote in the senate. frankly, people kind of saw the writing on the wall and a lot of people voted against the estate tax change. it would have imposed a higher rate than the bill from the

senate. they voted against it because they just wanted to get it over with. gwen: i noticed today, two very prominent democrats were not there at the ceremony. nancy pelosi, harry reid. what's the story behind that? >> the two leaders of the house and senate did not show up at the signing ceremony for a bill that was probably one of the biggest things that obama has done this year. and there's not a lot of love for this deal. and it was very interesting, when nancy pelosi gave her speech the floor at the end of the house debate last night, she -- it was an angry speech. she does not like this deal. she did say, i give obama credit for the stuff that he got in there. you know, the unemployment, the democratic side of the ledger is what she talked about. but, you know, she wasn't -- this isn't something she had a hand in. it wasn't something she was proud of. >> i watched this process, i wondered if part of what was going on here is congress is just sort of out of practice on

compromising. gwen: if i can piggy back on that, this earmarks debate where they pulled the budget bill off the floor and the republicans basically won without compromising to take $8 billion in earmarks out of their bill. >> yeah, that's right. compromise is kind of a habit and there hasn't been a lot of that going on. but earmarks have always been a big part of the way deals are cut. you can get your project, i get mine. but the mid-term elections put such a cloud of scandal around earmarks that when harry reid tried to bring up this big spending bill, a lot of people -- he thought he had the 60 votes to get it past the filibuster, but the republicans started going south, even though they had put in some of the earmarks, so he had to pull down the bill, and they're going to do a funding bill that is much more putting the government on auto pilot. gwen: the government is not going to close down. >> the government is not going to close down. gwen: never know. another domestic issue, a federal judge in virginia dealt

the first blow to the obama administration's biggest achievement, its health care law. the ruling which concludes it is unconstitutional to force individuals to purchase health insurance coverage is just the start of a big legal debate what. was the judge's reasoning? he was different from what other judgings have said. >> this was the third court case . he said it was unconstitutional. he said the commerce clause gives congress very broad power to regulate economic activity. but not economic inactivity. he said the decision by someone not to buy health insurance is inactivity. you can't drag them into the stream of commerce and then regulate them. now he said that -- and therefore you can't compel people to buy insurance. the obama administration had argued that -- that's a false way to look at it. there's no such thing as someone who is completely outside, because if you choose not to buy insurance, you're eventually going to get sick, you're going

to get hit by a bus, an anvil will fall on you, something. and you can't stay outside. you will eventually be part of this and therefore this is a false choice. but he rejected that argument. now, thrfers a fallback. the obama administration had said, well, ok, it's not really commerce clause power. it's taxing power. and here, they had a little stronger argument, because congress does have very broad power to tax almost anything. the judge said, well, i agree with what the president said initially when he was asked about this. it's not a tax. he said, you know, even though they stuck it in the tax code, look at it, it's really a penalty and not a tax. and by the way, virginia had argued, how can you tell it's not a tax? because if everybody follows the law, it doesn't raise any money at all. the tax was a penalty. if you didn't buy insurance, you had to pay the tax. gwen: so how does the supreme court handle it? when might that happen? >> well, as for when, in theory, if either party in one of these lawsuits -- and there are two

dozen of them, asked for expedited review, it can get it through the appeals court maybe in a year, maybe the supreme court, under the most optimistic scenario, would take it up in their turn that begins next october, october of 2011. i think that's theoretically possible but not realistic. so we're not looking at probably until the supreme court's term that starts in the fall of 2012. gwen: the formula for something that ends up in the court -- >> well, look, there's already a split. that's the easiest way for the supreme court to say we have to take this case because the lower courts are divided. they're already divided. you have a division in one judge in virginia said it's good and one judge said it's not. so there's already division. i guarantee you there will be a lot more. as for what the court will do, this area of the law, the court has been all over the place. under the rehnquist court when he was chief justice, they had a very narrow view under the commerce clause. recently, this supreme court has taken a somewhat more generous view. but this has been one of the most litigated areas of the

entire constitution. it's just very hard to tell what the supreme court would do. >> up on the hill, republicans were delaying with this ruling because they've been campaigning on the repeal and replace. they want to repeal the health care law and replace it with some other thing. i'm just wondering, do you see that this helps or hurts the legislative and political cause? >> well, it certainly gave that argument momentum. before this even became a big issue, there were some law professors out there saying this might be an issue. i'm astonished that no republicans picked up on that until very late in the debate. hatch and other members brought it up. but even they didn't think much of this argument. so if this decision has done nothing else, legally, it's legitimized this argument and given it a sort of sunday clothes that it can walk around in for a while. >> pete, i gather that this decision doesn't stop preparations for the health care program going forward. some of those provisions have already kicked in.

and there still are a bunch of other new cases pending that haven't reached this level. are they being argued on the same grounds and is there anything out there that might bring the machinery of government that's putting these health care plans in place to a halt? >> well, the good news for the white house here is that the judge said, ok, i think this provision that says you have to buy insurance is unconstitutional, but i'm not going to do what virginia asked me to do, which is to order it stopped. gwen: why did he do that? >> he said, look, i could be wrong about this, and there's plenty of time. there's two or three years before this thing kicks in in 2014. there's plenty of time to let it work through the courts so there's no need to do this. and this turned out to be very important, virginia wanted the entire law struck down. he said, no, you could just saw this part of the law out and leave the rest of it intact. now, many people would say that takes the engine of it away, the incentive for the insurance company. gwen: the white house said that, actually. >> right, exactly. i think the fact that he has done this, laid this marker down, other judges who may also

agree with him that it's unconstitutional may be hesitant to put a hold on it if he didn't. the other big case was argued this week, and that's one in florida brought by 20 states, mostly all but one, republican governors and attorneys general. it was argued this week and the judge there seems to think it's unconstitutional as well. gwen: so far, we've seen a republican judge rule against the law and two democratic judges rule for the law. you have to wonder if there's partisan motivation for it. >> judges always hate it when they bring that up. the very thought strikes them as horrid. but it's starting to look that way. who knows, that could continue all the way to the supreme court. gwen: i'll get mail from judges now. now we move on to foreign policy. in a major new report card on the war effort in afghanistan, progress, according to the president and his defense secretary and his secretary of state is fragile and reversible. >> our goal isn't to build a 21st century afghanistan.

our goal is not a country that is free of corruption, which would be unique in the entire region. what do we need to do along with our partners and the afghans to turn back the taliban's military and violent capabilities to the degree that the afghan government forces can deal with them. gwen: but is this happening? martha is back from another of her reporting trips. sixth one this year to the region. how does what secretary gates say -- how does it square with what you saw? >> they certainly are lowering the bar. i think it squares with what i saw in this sense. in the south, in canada har province, things have improved because that's where the bulk of the surge processes are. that's where the bulk of the additional troops that president obama sent in there are. people are feeling better there.

they feel more secure. in other parts of the country, and i spent a good deal of time in the eastern part of the country on the border, there's some heavy fighting still going on there. and in the north and the west, things have deteriorated. i think the fear there is that some of the taliban have squeezed into other areas that they're getting out of the areas in the south. gwen: are you talking about waziristan and other areas along the pakistani border? >> in the pakistani border and the east of afghanistan along that border, there's some heavy, heavy fighting still going on. some of those areas have deteriorated. gwen: so what pakistan does here is an important part of -- >> such an important part. i know they made a point of that at the white house in the review, concentrates on pakistan a lot. they are very serious about getting these safe havens cleaned out. i also went to the swath valley in pakistan. the swath valley two years ago was being overrun by the taliban. it was an extremely dangerous place. this time the pakistani military has moved in. but basically what happens over

there is the pakistani military goes after the places that they feel are a threat to them. that's not waziristan. what they're not doing is going after those places and going after al qaeda in waziristan, and that is where the u.s. has not been as successful and still wants the pakistanis. >> one of the reasons the fighting is so much worse near the pakistani border is that the taliban in the past this time of year would high tail it into pakistan. this year they're not. they're staying. why is that and what does that say about what they think the future is going to be? >> here's sort of a simple answer. the weather is still pretty good over there. usually in the wintertime, the fighting is slowed down. it hasn't really slowed down this time. but there is free passage on that border. you can't really seal borders, and so they're back and forth over that border. they have made progress. they've really made progress in some of those areas there, but they're still back and forth. >> based on what you saw in and what's in the report, what do

you think this means for obama's plan to draw down troops? it sounds like what you're saying is the area is where we have a lot more troops, things are better. >> as many troops as you have over there, about 100,000 troops, you don't have enough really to go into all these areas. that's one one of the problems. i think what you will see over the next four years, and the bottom line on this strategy is there are going to be four more years, and during those four years you'll see a significant draw-down back to probably where we were last year. i think it will start next year, and i think what you'll see next year in the july 2011 date is them saying, ok, we're going to take out this many now, probably not a significant amount. we're going to take out this many in six months and one year. by 2014, you'll see how that draw-down happens. >> 100,000 now to i guess about 65,000? >> i don't know the exact number. i don't think you'll see a lot

in the 2011, but by 2014, they want to see all combat troops out. iraq has cut all troops out, but there are 50,000 troops still there. gwen: sounds like a tug of war that will not result any time soon. welcome back. >> thank you. gwen: he was more involved. richard holbrooke passed away this week at the age of 69. most reporters in washington and most diplomats around the world had dealings with holbrooke at one time or another. he was brash, he was brilliant, and he was often frustrate. was that the case on his last mission, doyle? >> it was. the last extended conversation i had with him, he told me this job was the most difficult one he had ever tried, repairing american relations with pakistan. gwen: which is saying something. >> exactly, although with richard holbrooke, you don't know whether he was saying it for effect. every mission was going to be the most difficult. i think this one was.

if you think of getting these countries that don't deal with each other to deal with each other, marshaling the civilian side to match the efficacy of the military side, and he said he didn't know if success was possible. and tragically, he never lived to find out. but he was very good at what he was doing. he had an unusual range of talents for an american diplomat. there are lots of american diplomats who are terrific scholars of a region. there are lots who are very good negotiators. holbrooke added a couple things to that. he was a bureaucratic manipulator of enormous prowess. he was a collector of interesting people. he trained an awful lot of people in the foreign service. he was a politician. one of his accomplishments, he was most famous, of course, for the bosnia peace agreement in 1995 when he took the leaders of

that part of the world and locked them up until they gave into him. in dayton, ohio. but he actually negotiated a settlement between the congress and the united nations, and that required an ability to operate in congress and in american politics. and finally, richard holbrooke was a great charmer, not just of politicians, but of reporters. he spent lots of time with reporters. he had a big ego. there are lots of people, this will shock you, in washington who have a big ego. but not many wear their egos so openly than holbrooke. >> it was refreshinging, though. >> there was something charming about the transparency of it. many of us dealt with it. but that got in the way of his career at a bunch of different times because he also had a capacity to annoy enormously other people in the administrations he was in. >> but if you look at the sweep of his career, vietnam up until

the present day, are there other people like richard holbrooke out there? or have we seen the end of a breed here? >> there are other american diplomats in this generation who you could certainly compare holbrooke in terms of range of experience and what they've been able to do. i'll just name a couple. ryan crocker, who was the ambassador in iraq. he's now in academia. but one of the interesting things at that level is these guys often, as holbrooke did, go out and come back in high level jobs. gwen: are you talk about people who can replace as well? >> these are people who can conceivably replace him. chris hill, who was the ambassador in baghdad, a north korea negotiator. he was one of holbrooke's assistants at one point. but i think it is fair to say that holbrooke was unique in his sense of drama and his willingness to act it out in public. i mean, there really isn't anybody around who's a lot like

that. >> in terms of his impact on policy, did he leave a legacy anywhere in particular? >> he leaves a legacy in two places. he built a quite formidable group of experts that are still working on this. pulled a lot of the civilian side together. he did put pakistan front and center. he coined the term "agpak." gwen: we send our condolences to his wife and family. thank you, everyone. the conversation has to end here, but it continues online on our "washington week" webcast extra. this week's "national journal" question, will the tax bill make the president stronger or weaker? check out the answers at pbs.org. keep up with daily developments on the pbs news hour and we'll see you around the table next week on washington week. good night. captioned by the

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